Pacts that may be added to a sale, and one that is void

They are Articles 1290 to 1292 of the Civil Code of 2020: the section listing, by way of example, the clauses that may be added to a sale, the one declaring the "better buyer" clause void, and the one fixing how long those pacts may last.

Buyers and sellers wishing to add pacts to a sale of movable or immovable property under the Puerto Rico Civil Code.

• That the clause respect mandatory law and public order: Article 1291 requires it of any clause, listed or not.Verified against the official source
• For the rights under these clauses to be opposable to third parties, that they be recorded in the corresponding registry.Verified against the official source
• For the preference clause: that the buyer communicate their intention to alienate and that the seller exercise within the following two months, save agreement to the contrary.Verified against the official source
• That the agreed term not exceed four years for immovables or two years for movables from execution, save a longer term never exceeding double.Verified against the official source

• The sale contract recording the clause and its term: Article 1292 counts the period from the execution of the contract.
• Proof of recording in the corresponding registry, if the rights are to be opposable to third parties.
• In the preference clause, the buyer’s communication of their intention to alienate: the two months run from it.

1. 1

   Step 1: The list is exemplary, not closed

   Article 1290 says the parties may agree, "among other discretionary clauses", the four it lists. Article 1291 repeats it: the enumeration is exemplary and gives rise to many other possible clauses.

2. 2

   Step 2: Repurchase: the seller reserves the right to buy back

   Subsection (a): the seller reserves the right to recover the thing sold provided that, on exercising it, they restore the price as agreed. The Code develops the pacto de retro at length in another book, and that has its own guide here.

3. 3

   Step 3: Return: the buyer reserves the right to give it back

   Subsection (b), the mirror of the previous one: the buyer reserves the right to return the thing bought and, on exercising it, the seller must pay them the price as agreed.

4. 4

   Step 4: Preference: me first, if you are going to sell

   Subsection (c): the seller reserves the right to recover the thing sold, if the buyer decides to alienate it, in preference to any other acquirer. The article adds that this right is not transmissible on death.

5. 5

   Step 5: The two months of the preference

   The same subsection requires the buyer to communicate their intention to alienate, and the seller must exercise the right, save agreement to the contrary, within the two (2) months following the one in which the intention was communicated. The parties may agree a longer term, but in no case may it exceed double the term set here.

6. 6

   Step 6: Retention of title: I deliver, but it is not yours yet

   Subsection (d): the seller may reserve ownership of the thing sold, even though it has been delivered to the buyer, until full payment or a part of it is verified.

7. 7

   Step 7: Against third parties, only if recorded

   The last line of Article 1290 applies to all of them: the rights arising from the inclusion of any of these clauses are opposable to third parties only where recorded in the corresponding registry. Which registry corresponds is not stated by the article, and this guide does not guess.

8. 8

   Step 8: The clause the Code voids

   Article 1291: null and deemed unwritten is the "better buyer" clause, by which the sale may be rescinded if someone appears who offers more for the thing sold. It is the only one the article names; the rest is left to the filter of mandatory law and public order.

9. 9

   Step 9: How long these pacts may last

   Article 1292: a term not exceeding four (4) years for immovables or two (2) years for movables, counted from the execution of the contract; and the parties may agree a longer term never exceeding double those.

10. 10

    Step 10: A different number elsewhere in the Code

    It is worth saying plainly: the retracto convencional has its own chapter in Book Three, and Article 1041 there fixes four years absent express agreement and a maximum of ten years where stipulated. Article 1292 here says four and two years, extendable to double. They are different figures in different articles. This guide reports each where it is written and does not decide which governs your clause: the text does not settle it on its face.

The clauses are agreed in the contract itself, between the parties. For their rights to be opposable to third parties they must be recorded in the corresponding registry, and those rules live in the registry legislation, which we did not read here. Disputes are decided by the Court of First Instance.

• Inserting a "better buyer" clause: it is void and deemed unwritten.
• Believing Article 1290’s list is closed: it is exemplary.
• Believing that because it is exemplary anything goes: every clause must respect mandatory law and public order.
• Not recording the clause and then trying to raise it against a third party.
• Inheriting a preference clause: the article makes it non-transmissible on death.
• As a buyer subject to a preference clause, alienating without communicating the intention to the seller.
• As a seller, letting the two months from that communication lapse.
• Agreeing one of these pacts for more than four years on immovables or two on movables without the extension the article allows.
• Agreeing an extension exceeding double those terms.
• Assuming Article 1292’s ceiling and the retracto convencional’s in Article 1041 are the same figure: they are not.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov